A pair of second-half penalties from Lionel Messi, which completed his hat-trick, helped Barca fight from 3-2 down in the El Clasico at the Santiago Bernabeu.
Ancelotti, who felt his side deserved to take something out of the encounter, said errors were the difference between the two teams.
"The league race is still open. We need an immediate reaction," the Italian told a news conference.
"I've said it many times – the league will be decided in the last match. We have to continue fighting. We need to react.
"I haven't spoken to the players about the match yet. We committed small mistakes and that's why we lost.
"The team is ready to get up and move on. We have to be satisfied with how we played."
Karim Benzema's first-half brace had put Real ahead after Andres Iniesta opened the scoring on seven minutes.
Messi struck for the first time just before half-time but Cristiano Ronaldo restored Real's lead with a controversial penalty on 55 minutes.
But Messi delivered from the spot twice in 20 minutes as Sergio Ramos was sent off, putting Barca to within a point of top spot but still behind Atletico Madrid and Real (70 points each).
Ancelotti refused to criticise referee Alberto Undiano, instead focusing on his team's mistakes.
"It's difficult for me to comment on the referee's decisions," he said
"It's true that Messi scored three goals but any mistakes against a player of his quality will always hurt you.
"We have nine matches left. It will be all intense. Every game will be decisive."
Ancelotti is eager for his men to move on from the defeat with a tough clash against fifth-placed Sevilla to come on Wednesday.
"We have improved a lot, the team have showed their quality and proved it in this match," he said.
"It was a good game but we now have to forget about it quickly. Our next match is important."
